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Conditioning the Effects of Aid: Cold War Politics, Donor Credibility, and Democracy in Africa

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  • Dunning, Thad
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    Abstract

    The effect of foreign aid on regime type in recipient countries remains widely debated. In this research note, I argue that a recent focus on moral hazard has distracted attention from another mechanism linking foreign aid to domestic political institutions. During the Cold War, donors geopolitical objectives diminished the credibility of threats to condition aid on the adoption of democratic reforms. The demise of the Soviet Union and the end of the Cold War, on the other hand, enhanced the effectiveness of Western aid conditionality. I reanalyze an important recent study and demonstrate that the small positive effect of foreign aid on democracy in sub-Saharan African countries between 1975 and 1997 is limited to the post Cold War period. This new empirical evidence underscores the importance of geopolitical context in conditioning the causal impact of development assistance, and the evidence confirms that the end of the Cold War marked a watershed in the politics of foreign aid in Africa.I would like to thank Henry Brady, Jennifer Bussell, Ruth Berins Collier, David Collier, Robert Powell, Jason Seawright, Beth Simmons, Laura Stoker, and two anonymous reviewers for their comments. I am also grateful to Arthur Goldsmith for sharing his data. Any errors are my own.

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    Bibliographic Info

    Article provided by Cambridge University Press in its journal International Organization.

    Volume (Year): 58 (2004)
    Issue (Month): 02 (April)
    Pages: 409-423

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    Handle: RePEc:cup:intorg:v:58:y:2004:i:02:p:409-423_58

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    Cited by:
    1. repec:cge:warwcg:172 is not listed on IDEAS
    2. James Vreeland, 2011. "Foreign aid and global governance: Buying Bretton Woods – the Swiss-bloc case," The Review of International Organizations, Springer, vol. 6(3), pages 369-391, September.
    3. Buntaine, Mark T., 2011. "Does the Asian Development Bank Respond to Past Environmental Performance when Allocating Environmentally Risky Financing?," World Development, Elsevier, vol. 39(3), pages 336-350, March.
    4. Blanca MORENO DODSON & Grégoire Rota-Graziosi & Clémence Vergne, 2012. "Breaking the wave of democracy: The effect of foreign aid on the incumbent's re-election probability," Working Papers halshs-00722375, HAL.
    5. Axel Dreher & Stephan Klasen & James Raymond Vreeland & Eric Werker, 2010. "The costs of favoritism: Is politically-driven aid less effective?," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 26, Courant Research Centre PEG.
    6. Irene Vlachaki & Sarantis Kalyvitis, 2011. "When does more aid imply less democracy? An empirical examination," DEOS Working Papers 1125, Athens University of Economics and Business.
    7. Zohid Askarov & Hristos Doucouliagos, 2013. "Does aid improve democracy and governance? A meta-regression analysis," Public Choice, Springer, vol. 157(3), pages 601-628, December.
    8. Sonia Bhalotra & Thomas Pogge, 2012. "Ethical and Economic Perspectives on Global Health Interventions Abstract: Interventions that improve childhood health directly improve the quality of life and, in addition, have multiplier effects, p," The Centre for Market and Public Organisation 12/286, Department of Economics, University of Bristol, UK.
    9. Wantchekon, Leonard & Garcia-Ponce, Omar, 2013. "Critical Junctures: Independence Movements and Democracy in Africa," CAGE Online Working Paper Series 173, Competitive Advantage in the Global Economy (CAGE).
    10. Bermeo, Sarah Blodgett, 2011. "Foreign Aid and Regime Change: A Role for Donor Intent," World Development, Elsevier, vol. 39(11), pages 2021-2031.
    11. Perez Nino, Helena & Le Billon, Philippe, 2013. "Foreign aid, resource rents and institution-building in Mozambique and Angola," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
    12. Fleck, Robert K. & Kilby, Christopher, 2010. "Changing aid regimes? U.S. foreign aid from the Cold War to the War on Terror," Journal of Development Economics, Elsevier, vol. 91(2), pages 185-197, March.

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